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Monday, November 06, 2017

Capitalism Is a Farmer's Best Friend

It seems that almost every time I drive back to the farm in southeastern South Dakota, I become overwhelmed by how much things have improved economically.

Consider progress through the lens of perhaps the greatest technological innovation in agriculture: the tractor. With this multi-faceted application of the combustion-engine alone, production increased across America and Great Britain over 3,000% from previous levels. My great grandparents were fortunate enough just to have one. And my grandparents were fortunate enough to have a tractor with a cab. My parents were fortunate enough to have a tractor with a cab and air-conditioning.

Today, farmers enjoy temperature-control, inch-accurate GPS with auto-steering, IVT (Infinite Variable Transmission), suspension cabs, four-wheel drive (with additional wheels per axle), Bluetooth surround stereos, moonroofs, built-in coolers, and countless other features that weren’t even around fifteen years ago. Of course, not all farmers can afford such luxuries even today. But most can afford the used capital good that is now considered outdated – which still beats laboring in the dusty sun, day in and out.

And that’s just one piece of machinery.

Amazing Advancements in Farming

The advancements in planting, harvesting, storing grain, and managing livestock are equally as overwhelming for someone who remembers those July days in a tractor without A/C. EID ear-tags in bovine can track the weight, living habits, and health information of each animal from birth to slaughter. Nano-biosensors can track their disease. Advanced hydraulic chutes and cattle-run systems prevent countless injuries.

The whole farm sits within the palm of one’s hand!

Getting out of bed at 3am during January calving season to “check the cattle” is over with remote camera systems. Drones have now replaced small airplanes for 10,000+ acre ranchers in keeping track of their livestock. And to top it all off, most of these advancements are fully integrated with smartphones.

The whole farm sits within the palm of one’s hand! It’s unbelievable to me, but even more unbelievable to farmers and ranchers in their 80s and 90s.

It is hardly an exaggeration to suggest that twenty years from now, most farming – and possibly even ranching – will be almost entirely automated. Driverless tractors – currently in testing – will probably be commercially available within two years. This is in sync with the development of driverless trucks (to haul cattle and grain all over the map). The speedy development of multi-purpose robotics is a bigger piece to this puzzle with significant hurdles, but it is well underway to approaching some significant thresholds.

Production and Deconstruction

With such a rapidly changing world, one is left with at least two questions. First, how on earth did we get here? (Tractors don’t grow on trees.) And second, whatever happened to the grand visions of modernist centralization, top-down hierarchical planning, and the rise of the superior “administrator” to direct civilization? (Decentralization is proving incredibly effective in virtually every sector of society.)

Wealth is produced in the production process.

In pondering the first question, one might be tempted to regurgitate popular media mantras about “aggregate demand” and “consumerism,” so that all the world’s wealth can be attributed to the raw desire to consume. But, as any sound economics textbook will note, consumption comes after production.

Something can’t be consumed without first being produced. This means wealth is produced in the production process – as well as jobs at each level of production. This seems straightforward and easy to grasp, but it is not the economic perspective of the headlines – where “stimulus spending” and “credit availability” trump all.

In pondering the second question, a kind of postmodern “deconstruction” (the French post-structuralists would be mortified by my application of this term, but they’re dead so we’re good) is finding a new home everywhere. Global trade and free markets, blockchain currency, blockchain contracts, blockchain cloud storage, driverless cars, driverless trucks and tractors, Wikipedia, VR meetings from anywhere, open badges, and on it goes.

To borrow the words of Stanley Hauerwas, “Capitalism is, after all, the ultimate form of deconstruction.” Local knowledge, products, and cultures are no longer isolated from the rest of the world but making their mark on others through the world’s wide web.

Capitalism is a phenomenon of nature.

Notice, however, that all of this wealth-producing freedom isn’t “instituted” or “established.” Capitalism is not “a system” that people in a boardroom contrive from a central plan and then execute through a series of actions. It just happens.

Yes, work is required for production, but not toil or slavery. When centralized economies collapse, people naturally default to voluntary trade. When a bird is taken outside of its cage it doesn’t have to be told, “now go fly around and do stuff.” It does this because it’s a bird. Capitalism is a phenomenon of nature. It doesn’t have to be instituted, taught, or forced. The idea of what is “mine” and “yours” and giving and taking is intuitive from age one.

Restrained Coercion

This is an incredible thought: to sit inside the latest John Deere or Case tractor and marvel over its abilities and marvel, this was created because coercion was restrained. Wealth is possible by letting people be free. I don’t think it’s unreasonable to say that the world is made this way.

There is plenty of work to be done spreading the good news about wealth’s marriage with freedom.

In any case, it really is one of the best bargaining chips of tyrants and authoritarian dictators – showing that more wealth can be acquired through voluntary trade than by mass theft. It’s a bit of a paradox to systems of oppression and governmental bureaucracies that have a terribly warped orientation about things (“Wait, we can get stuff by being nice?”).

But one only has to look around: which government leaders are wealthier, those in North Korea or in Singapore? And which ones are more violent towards people?

Some countries, leaders, professors, and politicians are catching on to this. Nearly one-third of the entire world population was pulled out of poverty in the last half-century just by opening global trade, after all. But, there is plenty of work to be done in spreading the good news about wealth’s marriage with freedom – and it just might begin by leaving the city and wandering the cattle yard.